European Utilities & Clean Energy Regulated Networks Primer series: Part 2: A deep-dive into valuation

Research evidence excerpt

European Utilities & Clean Energy Regulated Networks Primer series: Part 2: A deep-dive into valuation

25 June 2026

European Utilities & Clean Energy

Regulated Networks Primer series: Part 2: A deep-dive into

valuation

Many of our team Top Picks for 2026 are regulated networks or allocating significant capex Deepa Venkateswaran, ACA

+44 20 7676 6990 to these businesses. Given investor interest, we have launched the Regulated Networks

deepa.venkateswaran@bernsteinsg.com Primer Series - in Part 1 we analysed the attractiveness of regulation across jurisdictions and

in this Part 2, we deep-dive into valuation.

Bartlomiej Kubicki

+49 69 717 4418 Premium to RAB introduction: Regulated utilities are best analysed by reference to bartlomiej.kubicki@bernsteinsg.com

the premium to Regulated Asset Base (RAB) metric, comparing the enterprise value

of a company (less the EV attributable to any unregulated assets) to the RAB. The RAB Jorge Alonso Suils

+34 915 893 913 represents the regulator’s assessment of the capital employed in the regulated activity on

jorge.alonso@bernsteinsg.com which the utility is entitled to earn a return, and is therefore the economic foundation of a

regulated utility. Companies which are able to beat the cost of capital and/or have strong

Rory Graham-Watson growth prospects are likely to trade at a premium to RAB, whilst companies with limited +44 20 7676 7093

rory.graham-watson@bernsteinsg.com growth prospects and/or poor performance can be expected to trade at a discount.

Ken-Ree Choong Drivers of RAB premium: Assuming acceptable returns, companies with strong growth

+44 20 7676 8243 prospects are likely to trade at a premium to RAB given the future value that will be

ken-ree.choong@bernsteinsg.com

captured by existing shareholders.